Last weekend’s summary execution of Alex Pretti by Customs and Border Protection agents in Minnesota highlighted to millions of Americans the nature of the Trump administration. First, they killed a disarmed man in cold blood after these poorly trained thugs with a badge freaked out, or simply decided they could do it with impunity. Afterwards, the administration issued bald-faced lies about what happened, while taking the line that no one would get hurt if everyone simply shut up and stopped resisting.
This is the easiest thing to do when the other side has all the power, which makes Canadian Prime Minister Mark Carney’s defiance all the more remarkable. The Trump administration has given the same mafioso ultimatum to Canada that it has to protesters, but on a grander scale—with the threat of annexation.
At the World Economic Forum Annual Meeting in Davos, Switzerland, Carney’s speech was a pointed, stinging rebuke of Donald Trump and his jingoistic foreign policy. He referred to Trump as a “hegemon” and called for a break in existing U.S.-Canadian relations. “This bargain no longer works,” he declared.
This speech is historic, as it represents the most open, direct rebuke of and break with Trump and the United States by former allies to date. Carney mentioned the writings of Václav Havel, which explored how corrupt systems that clearly no longer work sustain themselves through fear, compliance in advance, and people refusing to contradict what is clearly a lie. However, the system (communism, in Havel’s analogy) crumbles when the first person refuses to go along with the lie and suffers no consequences as a result. In essence, Carney is doing exactly what you need to do to break the bystander effect.
Trump responded to Carney’s temerity with his typical petulance. He stated on Truth Social that Canada was no longer invited to the “Board of Peace” he created, many of whose members are horrid dictatorships like Belarus, Saudi Arabia, Hungary, and Egypt. None of the U.N.’s other Security Council members have signed on, and it is doubtful that Canada was that interested in being a part of such an organization, either.
This break with the United States is historic; Canada does not appear to have any hope that the two neighbors’ irreconcilable differences can be overcome. It is a tacit acknowledgment that a right-wing, authoritarian movement in the United States is ascendant, and unlikely to be removed anytime in the foreseeable future. Even if a different administration comes to power in three years, the United States has proven to be an unreliable partner and cannot be trusted not to fall into idiotic despotism every four years.
This break will have long-term impacts for both the U.S. and Canada. It is difficult to overstate how closely intertwined the two countries are, economically, militarily, and administratively. Even though Canada’s population is one-ninth of America’s, Canada is our second-largest trading partner, and the U.S. accounts for 70 percent of all Canadian imports. Travel between the two countries is trivially easy, and you can spend up to 180 days per year in either country with little oversight. Canada and the U.S. have a shared airspace agreement, and NORAD is a joint U.S.-Canadian command.
Carney’s speech represents a profound shift in this relationship. Disentangling Canada from the U.S. is a monumental undertaking. It will be incredibly and increasingly disruptive, to Canada even more than the U.S. The prime minister did not make his comments at Davos lightly. To use a metaphor, it is like an abused spouse deciding to leave a relationship even if it means temporary hardship and poverty: It is not done on a whim.
The Canadian plan appears to be to power through whatever tariffs and punishments Trump metes out, shifting its alignment to more reliable trading partners like the European Union and China. Carney’s primary goal is closer integration with the EU. There has even been discussion about whether Canada is eligible to join the EU.
If Carney is successful in leading the democratic world in writing off the U.S. as a lost cause, it will initiate a cascade of consequences that will devastate the U.S. long term. When other countries cease kowtowing to the whims of a powerful but mad king, he loses his power. The United States is on the cusp of becoming a pariah state, ruled by a spoiled man-child who is increasingly and openly mocked for his obvious failings. It only takes one person to say the emperor has no clothes to give others the courage to act.
The gross domestic product of the European Union rivals that of the U.S. as a percentage of world share when calculating using purchasing power parity, which takes into account relative currency value and cost of goods. Recent U.S. GDP growth has been distributed unequally, and much of it is based on the AI bubble. The global economy also revolves around the American dollar. Eighty-eight percent of global foreign exchange transactions are in dollars, as are 58 percent of foreign reserve currency holdings.
The second-largest holdings? They are in the euro.
Should there be a significant shift away from the dollar to the euro, this would be catastrophic for the U.S. economy. Hyperinflation would be triggered, exacerbated by Trump’s attempts to remove Federal Reserve Chair Jerome Powell and replace him with someone committed to the loose money policy the administration desires in order to “juice” the economy.
Carney’s speech has been covered extensively in the press outside the U.S., which recognizes it for the titanic shift in policy that it is, and the open invitation to Europe to join him in defiance of Trump, consequences be damned. In it, Carney also mapped out what a post–American democracy world order looks like: Canada openly turning its back on the dysfunctional, unreliable, bullying kakistocracy that the U.S. has become and integrating with Europe as both economic powers move on.
In 1938, the strongest nation opposed to Hitler accepted a disgraceful surrender to a bullying monster. When history is written, I believe this may be remembered as the anti-Chamberlain moment: a leader of a (relatively) powerless nation throwing down the gauntlet and proposing to the democracies of the world that they band together as a unified front against a juvenile, narcissistic would-be hegemon who has never been effectively stood up to in his pampered life. It takes a great deal of courage to say “Slava Ukraini” to the man with a gun pointed at you. Mark Carney looked at Trump and his threats, and essentially said, “True North strong and free,” daring him to do his worst, knowing that Trump likely isn’t joking about pulling an Anschluss on Canada.
The U.S. is likely to learn a hard lesson economically about what happens when the world no longer revolves around it and the dollar. It is also about to learn what it means to be an international pariah, as former allies walk away and wash their hands of the entire sordid American mess.
